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Sales & Marketing Lessons from the Top 100 SaaS Companies of 2018

For the second year in a row Forbes, in partnership with Bessemer Venture Partners and Salesforce Ventures, released its Cloud 100 list of the top private SaaS companies in world.

Drift analyzed the marketing and sales practices of this year’s top companies and found that more businesses than ever are implementing conversational marketing to engage with prospects and buyers directly on their sites.

In addition to conversational marketing, video and messaging along with open, ungated content have emerged as major trends adopted across the Cloud 100.

You can read the full report at:

Sales & Marketing Lessons from the Top 100 SaaS Companies of 2018

  2. 2. TABLE OF CONTENTS 00. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 01. Who Are the Cloud 100? . . . . . . . . . . . . . . . . . . . . . . . . . . 
 02. What Tools Are the Cloud 100 Using? . . . . . . . . . . . . . . . 
 03. How Do the Cloud 100 Capture & Qualify Leads? . . . . . 04. The Two Megatrends: Messaging & Video . . . . . . . . . . . 
 05. Key Takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
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  3. 3. INTRODUCTION Imagine if you could look under the hoods of the world’s top sales & marketing organi- zations and see all of the tools, tactics, and strategies they use to drive growth. ☝ That was the inspiration for last year’s “Lessons from the Top 100 SaaS Companies” report, where we analyzed Forbes’ list of the best private cloud companies in the world. Our 2017 findings were eye- opening. For example, we found that only 15 companies in the Cloud 100 were using messaging and only 14 offered free, ungated content, like ebooks or white papers. Meanwhile, the other 31 companies offering long-form content and forced people to fill out lead capture forms before they could download it. 3
  4. 4. Spoiler alert: A lot has changed since 2017. At Drift, here’s what we’re noticing: The #NoForms movement is surging. Messaging usage is skyrocketing. And conversational marketing is now its own, independent category. Even Gartner and G2 Crowd have weighed in, and both agree that conversational marketing is poised to play a much larger role for businesses moving forward. Not to mention that nearly 30% of all companies on this year’s list have embraced conversational marketing by implementing Drift. (Oh, and we made the list too!) 34 INTRODUCTION
  5. 5. What all of this points to is a major shift in the way SaaS and B2B companies capture, qualify, and connect with their leads and customers. More and more of the world’s top companies are abandoning the traditional approach in favor of providing a real-time, on-demand experience. They’re focused on helping people buy NOW. So, let’s break this down and explore how Cloud 100 companies have been able to adapt to the way people prefer to buy and deliver on this “NOW” experience. In This Report… You’ll get a behind-the-scenes look at how the world’s top 100 SaaS companies manage their sales and marketing efforts — from the number of employees they have on their sales and marketing teams, to what tools they’re using on their websites, to whether or not they’re using lead capture forms. You’ll also learn how the two megatrends from last year’s report, messaging and video, are even more integral to building a modern sales and marketing strategy today. 3 INTRODUCTION
  6. 6. • The 3 most popular sales & marketing tools among the 2018 Cloud 100 are all FREE. Is your company using them? • While gated content is on the decline, conversational marketing is on the rise. As of 2018, 32 Cloud 100 companies are using messaging to connect with leads and customers, up from 15 in 2017. • Only 27 companies in the Cloud 100 use gated content to capture leads, down from 31 in 2017. Does your company still lock up content behind lead capture forms? 
 • 90% of Cloud 100 companies produce and share video content on a regular basis. Is your company taking advantage of video tools like YouTube, Vimeo, and Wistia? In a hurry? Here’s the tl;dr version. These are the 4 key takeaways you’ll find inside: 36 INTRODUCTION
  7. 7. 2018 marks the third year Forbes has put out its Cloud 100 list, which ranks the world’s best private cloud companies based on market leadership, estimated valuation, operating metrics, and people & culture. According to Forbes: “The companies on the Cloud 100 list have industry-beating metrics, including revenue growth, market share and valuation.” But apart from success, what do these companies have in common? And how do they differ? Let’s start with basics: Where do the companies in the Cloud 100 come from? 7 WHO ARE THE CLOUD 100?
  9. 9. Not surprisingly, the majority of Cloud 100 companies have their headquarters in the San Francisco Bay Area, the home of Silicon Valley. New York City and Boston (where Drift is headquartered 👋) round out the top three. Utah, North Carolina, and Los Angeles are also emerging hotspots for Cloud 100 companies. Internationally, Canada, the UK, the Netherlands, Estonia, Switzerland, Israel, India, and Australia are all represented. There are also two companies, Zapier and InVision, who are fully remote without traditional offices or headquarters. Later in this report, we’ll explore two technologies (messaging and video) that help make remote work possible. But right now, let’s take a look at the top industry categories represented in the Cloud 100. 9 WHO ARE THE CLOUD 100?
  10. 10. The Top Industry Categories Among the Cloud 100 9 11 1212 15 Infrastructure & Developer Tools Sales & Support Data & Analytics Collaboration & Work Security 10 WHO ARE THE CLOUD 100?
  11. 11. Industry Category While all of the companies in the Cloud 100 create cloud-based software, there are hundreds if not thousands of industry categories that fall under that broad umbrella. Among the Cloud 100, Forbes found that Infrastructure & Developer Tools had the highest representation, with 15 companies — including 1st-ranked Stripe. Here’s a breakdown of the top five industry categories represented in the Cloud 100: • Infrastructure & Developer Tools (15 companies) • Sales & Support (12 companies) • Security (12 companies) • Data & Analytics (11 companies) • Collaboration & Work (9 companies)
  12. 12. SurveyMonkey Slack Tanium AvidXchange Dataminr $1.5 billion $1.26 billion $600 million $577 million $577 million 12 The Top 5 Fundraisers total funding raised WHO ARE THE CLOUD 100?
  13. 13. Funding As you can see, the Infrastructure & Developer Tools category accounts for the lion’s share of listings on the Cloud 100, but when you compare these same categories by funding, Data & Analytics comes out on top. According to Forbes, investors have put up a combined $3.93 billion in funding for Data & Analytics companies. And while Forbes could not provide funding data for every company on their Cloud 100 list — with figures for MailChimp (#11), Yardi (#22), and Veeam (#30) notably absent — they do provide data for the overwhelming majority of companies. So we thought it would be worthwhile to see which of those companies have been collecting the most cash from investors. When we rank the Cloud 100 based solely on funding, it’s clear that SurveyMonkey — with more than $1.5 billion raised — takes the top spot. 13 WHO ARE THE CLOUD 100?
  14. 14. We can safely predict, however, that SurveyMonkey will lose this title next year. And that’s because within weeks of being named to the 2018 Cloud 100 list (a list of the world’s top private cloud companies), SurveyMonkey went public, raising $180 million from its IPO. Continuing down the line, Slack, which is rumored to be preparing for an IPO itself, comes in second place with $1.26 billion in funding, followed by Tanium with $600 million, and avidXchange and Dataminr, both of which have raised a cool $577 million. 14 WHO ARE THE CLOUD 100?
  15. 15. COMPANY SIZE SALESPEOPLE MARKETERS smallest median average largest 6,146 60 4 5 253635 33 23 83 56 706 543 # of employees 15 Employee Breakdown WHO ARE THE CLOUD 100?
  16. 16. Employees Companies in the 2018 Cloud 100 have, on average, 706 total employees, 33 of whom work in marketing (including branding, demand generation, and events). And while both of these figures are up from last year — when Cloud 100 companies had an average of 643 total employees, 29 of whom worked in marketing — the proportions have hardly changed: In 2017, marketers represented 4.8% of a Cloud 100 company’s workforce. In 2018, marketers represent 4.7% of a Cloud 100 company’s workforce. But marketing is only one half of a bigger team: sales & marketing. The two are inexorably linked, and need to be linked in order for a company's funnel to run smoothly. So in this year’s report, we also looked at the salespeople working at Cloud 100 companies (including account executives, business development reps, and sales development reps). We found that, on average, each Cloud 100 company employs 83 salespeople, who represent 12% of the company’s workforce. 16 WHO ARE THE CLOUD 100?
  17. 17. 29% 29% The 25 Most Popular Tools #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 #21 #22 #23 #24 #25 19%22%25%31%57% WHAT TOOLS ARE THE CLOUD 100 USING? 17 90% #1 #2 #3 #4 #5 49% 29% 23% 22% 88% 44% 22% 21% 72% 42% 22% 21% 59% 32% 27% 22% 20% = % of companies using tool
  18. 18. Google Tag Manager has officially dethroned Google Analytics as the most used tool among Cloud 100 companies. Back in 2017, Google Analytics reigned supreme, with 64% adoption among the Cloud 100. Google Tag Manager was the second-most popular tool, with 54% adoption. A year later, both tools have surged in popularity, but Google Tag Manager, with its staggering 90% adoption among 2018 Cloud 100 companies, has emerged victorious. Overall, the top five most used tools among the Cloud 100 has remained the same — only the order has changed. This year, G Suite is the third most popular tool with 72% adoption (up from 46% in 2017). Marketo, meanwhile, slipped from third to fourth place, but still boasts 59% adoption (up from 48% in 2017). Rounding out the top five — for the second year in a row — is Facebook Ads, with 57% adoption (up from 36% in 2017). 18 WHAT TOOLS ARE THE CLOUD 100 USING?
  19. 19. When we zoom out and look at the top 25 most popular tools used by 2018 Cloud 100 companies, we see several new additions since 2017, including Nginx, Hotjar, New Relic, and us (Drift). Also worth noting: not only did video companies YouTube, Vimeo, and Wistia, which were among the most popular tools in the 2017 Cloud 100, earn that distinction again this year, they also all grew in popularity. Wistia grew from 14% adoption among the Cloud 100 to 22% adoption, Vimeo grew from 17% adoption to 22% adoption, and YouTube grew from 19% to 29% adoption. The takeaway here: Video continues to grow in importance among top SaaS sales & marketing teams and is showing no signs of slowing down. 19 WHAT TOOLS ARE THE CLOUD 100 USING?
  20. 20. If you’re looking to connect with leads and customers, now, video is no longer a nice-to-have, it’s a must- have. Customers want to hear your voice and see your face and have conversations with real people. That’s how you build trust. david cancelCo-founder & CEO, Drift “ 20 WHAT TOOLS ARE THE CLOUD 100 USING?
  21. 21. We’ll talk more about the growth of video (and messaging) later in the report. But right now, let’s focus on an aspect of sales & marketing that countless SaaS companies continue to struggle with: capturing and qualifying leads. For the past decade, SaaS sales and marketing teams have followed the same playbook for capturing and qualifying leads: Step 1: Get people to fill out lead capture forms on your website Step 2: Follow up with those leads later via phone or email From the buyer’s perspective, of course, this is a terrible experience. Because instead of being able to connect with companies and buy NOW, when they’re already online and at their most interested, buyers have no choice but to wait. That’s what happens when lead capture forms power your lead capture and qualification strategy. 21 HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  22. 22. The Rise of the #NoForms Movement Traditionally, one of the best ways to entice potential customers into filling out forms has been to offer ebooks, white papers, and other long form content — the idea being that people are “paying” for that content by providing companies with their personal information.          That’s exactly what we’d been doing at Drift...up until 2016. That’s when we realized the traditional playbook was broken. In addition to producing diminishing returns (a.k.a. lower and lower conversation rates), the traditional approach just didn’t feel right from a branding perspective. We wanted to be helpful and friendly, and to us, that meant getting rid of forms and giving all of our content away for free. 22 HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  23. 23. 23 Back in 2016, we were looking at hypergrowth companies like Slack and MailChimp for marketing inspiration. And what we realized was that these two companies, both of which have made the Cloud 100 list three-years running, succeeded and continue to succeed by investing in their brand and making the customer experience as incredible as possible. “ dave gerhardtVP of Marketing, Drift HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  24. 24. 27 31 2017 2018 # of Cloud 100 companies that make leads fill out forms in exchange for content 24 The Decline of Gated Content HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  25. 25. Among the Cloud 100, there’s been a decline in gated content between 2017 and 2018 — an indication that the #NoForms movement is catching on. In 2017, 31 companies in the Cloud 100 made leads fill out forms in exchange for content. In 2018, that figure dropped to 27 companies. 25 HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  26. 26. 21% % of companies still using traditional lead capture forms to start sales conversations 26 “Contact Us” Forms Still Sticking Around 79% HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  27. 27. Overall, however, 79% of companies in the 2018 Cloud 100 are still using lead capture forms on their websites. Just go to any SaaS website and click the “Contact Us” or “Talk to Sales” or “Get a Demo” button and see what happens: In most cases, it will direct you to a lead capture form. To make matters worse (from a buyer experience perspective), the number of mandatory fields Cloud 100 companies include in their lead capture forms has risen — from an average of 6 mandatory fields in 2017 o an average of 7 mandatory fields in 2018. 27 HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  28. 28. 2017 2018 average # of form fields on Cloud 100 lead capture forms 28 7 6 An Increase in Form Fields HOW DO THE CLOUD 100 CAPTURE & QUALIFY LEADS?
  29. 29. Messaging In the previous section, you learned that a majority of Cloud 100 companies still rely on lead forms to capture and qualify leads. But what about those companies not using does that even work? That’s where conversational marketing comes into play. By adding messaging to your website, you give potential customers the ability to connect with you when it’s most convenient for them: while they’re live on your website. 29 THE 2 MEGATRENDS: MESSAGING & VIDEO
  30. 30. “Imagine you walked into a brick-and-mortar store and the store’s employees refused to talk to you. And in order to buy something, you had to write your contact info down on a clipboard and wait for a follow-up. Sounds ridiculous, but that’s exactly how most SaaS companies have been treating their website visitors for years. By implementing conversational marketing, companies open up a real-time lead generation channel to instantly connect qualified leads with sales reps. david cancelCo-founder & CEO, Drift 30 THE 2 MEGATRENDS: MESSAGING & VIDEO
  31. 31. # of Cloud 100 companies using messaging/chat 2017 2018 31 15 32 Messaging Adoption Is Reaching Critical Mass THE 2 MEGATRENDS: MESSAGING & VIDEO
  32. 32. With messaging, instead of forcing people to wait, you can qualify leads instantly through having real-time, one-to-one conversations. And as a result, leads end up moving more quickly through your funnel. Couple the benefits of messaging with the fact that it’s become the default mode of communication for billions of people around the world and it won’t come as a big surprise to learn that between 2017 and 2018, messaging adoption among the Cloud 100 increased: from 15 companies using messaging on their websites in 2017 to 32 companies in 2018. 32 THE 2 MEGATRENDS: MESSAGING & VIDEO
  33. 33. Video The second megatrend that is reshaping the sales & marketing tactics of Cloud 100 companies is video. A decade ago, many companies considered video too expensive and/or too difficult to produce. But thanks to the rise of smartphones (and their built-in cameras) and easy-to-use video editing software, these days any sales & marketing team can invest in video. Meanwhile, video hosting services like YouTube, Vimeo, and Wistia (which, as you learned earlier, are all growing in popularity among the Cloud 100) make sharing, embedding, and monetizing videos easier than ever. If that isn’t enough to convince you to invest in video, consider this statistic: In 2017, only 34 companies in the Cloud 100 were regularly producing video content. Today, 90 companies in the Cloud 100 are producing videos. 33 THE 2 MEGATRENDS: MESSAGING & VIDEO
  34. 34. # of Cloud 100 that regularly produce video 2017 2018 34 34 90 9 out of 10 Companies Are Investing in Video THE 2 MEGATRENDS: MESSAGING & VIDEO
  35. 35. KEY TAKEAWAYS 35 The 3 most popular sales & marketing tools among the 2018 Cloud 100 are all free tools from Google: Google Tag Manager, Google Analytics, and G Suite. 1 Don’t forget the basics.
  36. 36. Between 2017 and 2018, there was a decline in the number of Cloud 100 companies that make people fill out forms in exchange for ebooks and other content. And while most companies still use lead capture forms on their websites, the #NoForms movement is picking up speed. 36 KEY TAKEAWAYS 2 Consider setting your content free.
  37. 37. = 37 KEY TAKEAWAYS Nearly a third of Cloud 100 companies are now using messaging on their websites to capture and qualify leads in real-time via one- to-one conversations. That’s up from 15 companies in 2017. Using a conversational approach isn’t some far-flung idea, it’s now a proven strategy for shortening sales cycles and growing revenue. 3 Replace forms with conversational marketing.
  38. 38. 90% of companies in the 2018 Cloud 100 produce video content on a regular basis and share it with the world using tools like YouTube, Vimeo, and Wistia.
 38 KEY TAKEAWAYS If video isn’t part of your sales & marketing strategy, it should be.4
  39. 39. We (Drift) gathered the data for this report using good old- fashioned detective work. After Forbes released its 2018 Cloud 100 list, we snapped into action to analyze the websites and LinkedIn profiles of the Cloud 100. In order to figure out what tools Cloud 100 companies use on their websites, we leveraged the data enrichment tool ClearBit (which integrates with Drift). Our goal with this report is to provide a snapshot of how Cloud 100 companies were running sales & marketing at a specific point in time (fall of 2018). Given the nature of high-growth companies, many of the figures we cite in this report are likely to fluctuate as companies evolve. Want to stay up to date with the latest changes happening in sales & marketing? Join 20k fellow marketers and salespeople and sign up for our newsletter. 39 METHODOLOGY